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28 August 2015

Matomy Media Group Reports 2015 Interim Results

Interim results for six-month period ended 30 June 2015

Matomy Media Group Ltd., one of the world's leading digital performance-based advertising companies, announces its interim results for the six-month period ended 30 June 2015.

Strong growth in mobile, video, email and domain monetisation activities, driven by enhanced programmatic capabilities

Non-GAAP Financial Highlights


 ($ millions)
H1 2015 H1 2014PF* Change
Revenue 125.0 129.1 (3.2)%
Adjusted gross profit 34.2 37.4 (8.6)%
Adjusted EBITDA 9.7 12.7 (24.0)%

* Consolidated full Group numbers, including Team Internet on a pro-forma basis

GAAP Financial Highlights


 ($ millions)
H1 2015 GAAP H1 2014 GAAP Change
Revenue 125.0 107.6 16.2%
Gross profit** 27.9 28.8 (2.9)%
Operating profit** 3.2 6.5 (51.8)%
Pre-tax profit** 2.5 13.9 (82.0)%
Net income** 1.5 12.6 (88.1)%
Earnings per share** 0.01 0.18 (94.4)%

** GAAP financial data in H1 2014 included a one-time accounting gain of $7.3 million, attributable to the acquisition of Team Internet. Additionally, the H1 2015 results include amortisation charges of $4.1 million, attributable to the acquisitions of Team Internet, MobFox and Avenlo, which occurred after H1 2014. Without the effect of these adjustments, the results would have been as follows:


($ millions)
H1 2015 H1 2014 Change
Gross profit 29.8 28.8 3.5%
Operating profit 7.3 6.5 12.3%
Pre-tax profit 6.6 6.6 0.0%
Net income 4.5 5.3 (15.1)%
Earnings per share 0.04 0.08 (51.0)%

Business and operating highlights

  • Revenue increased 16.2% to $125.0 million on a GAAP basis (H1 2014: $107.6 million).
  • Continued growth of strategic business activities:
    • Aggregate mobile traffic across all media channels contributed approximately 28% of Group revenue (H1 2014: 12%);
    • Aggregate programmatic advertising activity across all media channels represented nearly 60% of Group activity;
    • Video activity revenue increased 81% to $25.2 million (H1 2014: $13.9 million);
    • Social media activity revenue increased 24% to $8.4 million (H1 2014: $6.8 million);
    • Mobile activity (mobile web and in-app) revenue increased 19% to $13.4 million (H1 2014: $11.3 million);
    • Email activity revenue grew 28% to $12.2 million, due to improved data and deliverability capabilities; and
    • Aggregate domain monetisation activity increased 9% to $21.6 million (H1 2014: $19.8 million on a pro-forma basis), supported by proprietary programmatic capabilities.
  • Acquired a 70% majority stake in data-driven email marketing business Avenlo, which helped the Group’s email activity grow by 27% in Q2 2015 from the previous quarter.
  • Completed the full technical and operational integration of MobFox, strengthening Matomy’s mobile programmatic advertising capabilities, industry relationships and client base.
  • Strong balance sheet maintained in H1 2015, whilst net cash increased to $26.6 million (H1 2014: $21.9 million net debt) due to funds raised in Matomy’s 2014 initial public offering.
  • The ongoing industry-wide shift towards real-time bidding and programmatic advertising (collectively "RTB") has triggered several changes in Matomy's operational and business structure, which include: increased focus on the Group’s mobile activity; additional investment in the US market, supported by the relocation of Matomy's CEO to New York; strengthening the dedicated programmatic advertising unit; and increased technological focus on these activities.
  • The shift towards RTB has also triggered restructuring of the existing business units to leverage operational advantages and provide a unified media offering that supports shorter service and decision-making cycles for both advertising clients and media partners.
  • Following its 23 April 2015 trading update, Matomy is confident that the changes it made place it firmly on the path towards sustained, long-term operational and financial success.
  • Based on current business trends, Matomy’s Board expects the Group to deliver full-year adjusted EBITDA in the range of $25 million – $27 million, broadly in line with previous guidance.

Ofer Druker, Chief Executive Officer of Matomy, said:

"The digital advertising industry is undergoing significant changes that are causing certain disruptions to different aspects of the marketplace. As such, we experienced a challenging first half of the year in the display business unit. However, these challenges have validated our diversified business model, and contributed to increased focus on our main strategic growth engines through enhanced programmatic capabilities, as well as to the strength of our recent acquisitions. These are now all strong pillars of our global activity.

"Our Board and management team support the strategic and operational changes we implemented to grow our business. We have seen particularly strong momentum since June, reflecting some of the actions we took to reorganise and refocus certain parts of the business around our strategic growth drivers. Additionally, we have completed the integration of the business activities of MobFox, and are in near-final stages of completion of the full integration with Avenlo. Taken together, these developments are helping to accelerate the year-on-year growth of our mobile, video and programmatic-based activities, all of which support the achievement of our operational and financial targets for the year. 

"We are confident that the changes we have made to our operations, combined with further planned investments and prudent cost reductions, will strengthen our market position and drive our long-term profitable and sustainable growth."

Enquiries:

Matomy Media Group
Keith Trivitt, VP Global Marketing and Communications
ktrivitt@matomy.com
+1 417 299 5996

A copy of this announcement will be available on the Matomy website, www.Matomy.com, today from 7.00am BST.

Matomy will host an analyst conference call at 11.00am BST / 6.00am EDT Friday 28 August 2015 to discuss these results. Matomy CEO Ofer Druker, and CFO Sagi Niri, will host the call. The conference call can be accessed at +44 (0) 808 238 9578 (UK), +1 888 771 4371 (US) or +972 1809 212 582 (Israel), conference ID# 4043 3226.

About Matomy Media Group Ltd.

Matomy Media Group Ltd. (LSE:MTMY) is one of the world’s leading digital performance-based advertising companies, delivering results across web, mobile and social media platforms. Matomy provides a single gateway to all digital media channels, and combines internal media capabilities with advanced optimisation technology to ensure quality leads and sales for its advertising clients and maximum monetisation for its media partners. Matomy’s multi-channel performance-based advertising solutions include: a display ad network; mobile, social and video advertising; email marketingsearch marketing and search engine optimisation; an incentivised advertising platform; and domain monetisation. 

For more information:
www.Matomy.com 

Facebook: www.facebook.com/MatomyMediaGroup
Follow Matomy on Twitter: @MatomyGroup
LinkedIn: www.linkedin.com/company/matomy-media-group 

Notes to Editors

  • Active customers

Matomy defines an "active customer" as a customer from whom Matomy has recognised revenues during the previous 12 months. Matomy defines a customer as a legal entity and/or an entity that has a unique invoicing relationship with Matomy, expressly excluding direct with advertising exchanges. Where Matomy has separate invoicing relationships with multiple brands, branches or divisions within an organisation, Matomy typically counts all such entities as a single customer. Matomy also counts a customer who runs campaigns in multiple media channels or geographic regions as a single customer. Matomy considers each advertising agency as a single customer, although such agency may have multiple clients for whom Matomy manages digital marketing campaigns. Matomy believes these criteria best identify customers that are actively using its solutions. Matomy believes that the growth of its active customers is an important indicator of its ability to grow its business overall, and that reporting its active customers based on the previous twelve-month period is more representative of its business because it takes into account seasonality.

  • Adjusted gross profit

Adjusted gross profit is a non-GAAP financial measure that Matomy defines as revenues less direct media costs, which are the direct costs associated with the purchase of digital media. These costs include: payments for digital media based on the revenues Matomy generates from its customers on a revenue-sharing basis; payments for digital media on a non-revenue-sharing basis (CPC or CPM); and serving fees for third-party platforms.

Matomy believes that adjusted gross profit is a meaningful measure of operating performance because it is frequently used for internal management purposes, indicates the performance of Matomy’s solutions in balancing the goals of delivering results to its customers whilst meeting margin objectives, and facilitates a more complete understanding of factors and trends affecting Matomy’s underlying revenues performance.

  • Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that Matomy defines as net income before taxes on income, financial expenses (income), net, equity losses of affiliated companies, net, depreciation and amortization, share-based compensation expenses and exceptional items. Adjusted EBITDA is a key measure Matomy uses to understand and evaluate its core operating performance and trends, to prepare and approve its annual budget, to develop short- and long-term operating plans and to determine bonus payments to management. In particular, Matomy believes that by excluding share-based compensation expenses, adjusted EBITDA provides a useful measure for period-to-period comparisons of Matomy’s core business.